1. Chapter 16 Section 3

2.  Columbia Exchange  Mercantilism  Balance of trade  Subsidies  Capitalism  Joint-stock  Joint-stock companies

3. Widespread exchange of plants, animals and disease between two groups Plants and animals to develop differently Europeans did not know potatoes, sweet potatoes, corn or turkeys

4. People in the Americas did not know coffee, oranges, rice, wheat, sheep, or cattle Introduction of beasts of burden (horses) Only domesticated beast was a llama Horse was a new source of transportation and labor

5.  Exchange of food and animals had a dramatic impact  Corn and potatoes became a staples in the European diet  Foods provided nutrition and people could live longer

6.  Cattle ranching in Texas  Coffee growing in Brazil would not have been possible  Cows and coffee came from the old world  Imagine Italian food without tomatoes  Some thought tomatoes were poisonous

7.  1600’s they were in Italian cookbooks  Corn in China caused population to grow  China bought a lot of U.S. silver  Corn and peanuts grow in Africa  One third of all food crops grown came from the America

8.  Diseases brought by the Europeans  Diseases killed millions  Smallpox  Measles  Influenza  Malaria  Few diseases were introduced to Europe

9.  1518 half the population of Santo Domingo died of smallpox  Mexico’s population decreased by 30% in 10 years  Inca’s decreased from 14 million to 2 million

10.  1500’s new type of economy  Mercantilism – the nation’s strength depends on its wealth  Had power to build a strong military  Wealth measured y the amount of gold and silver one had

11.  One nation got wealthier by taking away items from another  Led to intense competition between nations in the 1500’s and 1600’s

12.  Build wealth in two ways  Extract gold and silver  Sell more items than you buy  This strengthened their country while weakening another  Favorable balance of trade was essential

13.  Reduce the amount of goods imported  Place tariffs on goods imported (adds to the cost)  Imported goods became more expensive (discouraged people to buy)  Sell exports for high prices

14.  Manufactured goods sold for more than raw material (woolen cloth vs. raw wool)  Subsidies- governments provide grants of money to help start a new business  Control oversee sources of goods

15.  Foreign country were looked at as rivals  At any time they could cut off resources  European nations worked to become self sufficient

16.  Building of colonial empires essential mercantilist system  Control sources of raw materials  Provide new markets for manufactured goods  Colonies could only sell to home country  Colonies only existed to benefit the home country

17.  Towns and cities grew as business increased  Wealthier merchants arose  Wealthy merchants enjoyed mobility  Most people are still poor

18.  Most economic activity is carried on by the private individual or organization for profit  Individuals not governments amass great fortunes  Merchants supply colonies with goods from Europe

19.  Brought back raw materials and products from the Americas  Overseas trade made wealthy merchants  Business activity in Europe increases

20.  Investors took risks and invested overseas  Demand drove up prices  Increase of money supply in Europe caused increase  Shiploads of gold and silver flowed to Europe from America

21.  Joint-stock companies- investors began to pool their money to fund even larger businesses  Investor bought shares  If company achieved a profit they all shared  Based on number of shares

22.  If company failed investors only lost the cost of their shares  British East India Company- first joint stock company  Founded in 1600 to import spices from Asia

23.  Other companies formed because of the expenses of forming a new colony  The Virginia Company of London established the first successful colony in America  Jamestown Virgina